<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
___ For the transition period from to
Commission file number 0-21958
QRS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 68-0102251
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
Identification No.)
1400 MARINA WAY SOUTH, RICHMOND, CA 94804
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(510) 215-5000
- --------------------------------------------------------------------------------
(Registrant's phone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. X YES NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASSES OF COMMON STOCK OUTSTANDING AT MARCH 31, 1998
- ----------------------- -----------------------------
Common Stock, $.001 par value 8,540,109
This document contains 11 pages.
The Exhibit listing appears on Page 10.
<PAGE>
QRS CORPORATION
FORM 10-Q
INDEX
NUMBER PAGE
- ------ ----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of March 31, 1998 and
December 31, 1997 3
Consolidated Statements of Earnings for the Three Months
Ended March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 3. Qualitative and Quantitative Disclosure about Market Risk 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
A. Exhibits
B. Reports on Form 8-K
SIGNATURES 11
2
<PAGE>
PART I . FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
QRS CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
------
MARCH 31, DECEMBER 31,
1998 1997
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37,319 $16,091
Marketable securities available-for-sale. . . . . . . . . . . . . . . . . . . . . . . . . . 3,497 17,694
Accounts receivable - net of allowance for doubtful accounts of $979 in 1998 and $873 in 1997 14,053 14,567
Deferred income tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 870 870
Prepaid expenses and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 957 1,260
------- -------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,696 50,482
Property and equipment:
Furniture and fixtures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,336 2,162
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 7,782
Leasehold improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,845 1,800
------- -------
13,181 11,744
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,671 4,062
------- -------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,510 7,682
Marketable securities available-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . 498 1,000
Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538 2,576
Capitalized product development costs - net of accumulated amortization of $2,923 and $2,818 in
1998 and 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,329 2,085
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 177
------- -------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $68,766 $64,002
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,357 $3,733
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,519 2,711
Sublease loss reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 1,494
------- -------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,876 7,938
------- -------
Deferred rent and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,296 1,335
------- -------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,172 9,273
------- -------
Stockholders' equity :
Preferred stock - $.001 par value; 10,000,000 shares authorized; none issued and outstanding - -
Common stock - $.001 par value; 20,000,000 shares authorized; 8,540,109 shares outstanding
in 1998 and 8,531,366 shares in 1997. . . . . . . . . . . . . . . . . . . . . . . . . . 64,304 63,864
Treasury stock (1,300 shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35) (35)
Unrealized gain (loss)on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 (9)
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,732) (9,091)
------- -------
Total Stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,594 54,729
------- -------
Total liabilities and Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . $68,766 $64,002
------- -------
------- -------
See notes to Consolidated financial statements.
</TABLE>
3
<PAGE>
QRS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
MARCH 31, 1998 MARCH 31, 1997
-------------- --------------
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,034 $16,354
Cost of revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,255 9,123
-------------- --------------
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,779 7,231
Operating expenses:
Sales and marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,793 2,293
Product development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 940 1,001
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . 1,485 1,169
-------------- --------------
Total operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 5,218 4,463
-------------- --------------
Operating earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,561 2,768
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544 441
-------------- --------------
Earnings from continuing operations before income taxes. . . . . . . . . . . . . 4,105 3,209
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,642 1,284
-------------- --------------
Earnings from continuing operations after income taxes . . . . . . . . . . . . . 2,463 1,925
Discontinued operations:
Gain from sale of software and services business . . . . . . . . . . . . . . . . 896 -
-------------- --------------
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,359 $1,925
-------------- --------------
-------------- --------------
Basic earnings per share:
Continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.29 $0.23
Discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10 -
-------------- --------------
Net earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.39 $0.23
-------------- --------------
-------------- --------------
Shares used to compute basic earnings per share. . . . . . . . . . . . . . . . . 8,540,109 8,411,119
-------------- --------------
-------------- --------------
Diluted earnings per share:
Continuing operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.28 $0.22
Discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.10 -
-------------- --------------
Net earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.38 $0.22
-------------- --------------
-------------- --------------
Shares used to compute basic earnings per share. . . . . . . . . . . . . . . . . 8,915,325 8,648,306
-------------- --------------
-------------- --------------
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
QRS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
---------------------------
1998 1997
------- -------
<S> <C> <C>
Operating activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,359 $1,925
Adjustment to reconcile net earnings to net cash provided by (used in)
operating activities:
Gain from sale of software and services business. . . . . . . . . . . . . . (1,494) -
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . 714 357
Stock option compensation . . . . . . . . . . . . . . . . . . . . . . . . . - 8
Changes in:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514 (1,493)
Prepaid expenses and other. . . . . . . . . . . . . . . . . . . . . . . . . 303 (337)
Deferred income tax assets. . . . . . . . . . . . . . . . . . . . . . . . . 2,236 1,274
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18) (15)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,624 (1,805)
Deferred rent and other . . . . . . . . . . . . . . . . . . . . . . . . . . (39) (179)
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (1,192) (166)
------- -------
Net cash provided by (used in) operating activities . . . . . . . . . . . 8,007 (431)
------- -------
Investing activities:
Marketable securities-available for sale (net) . . . . . . . . . . . . . . . . 14,765 (7,092)
Purchase of property and equipment . . . . . . . . . . . . . . . . . . . . . . (1,437) (1,179)
Capitalization of product development costs. . . . . . . . . . . . . . . . . . (349) (127)
------- -------
Net cash provided by (used in) investing activities . . . . . . . . . . . 12,979 (8,398)
------- -------
Financing activities:
Exercise of stock options. . . . . . . . . . . . . . . . . . . . . . . . . . . 242 55
------- -------
Net cash provided by financing activities . . . . . . . . . . . . . . . . 242 55
------- -------
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . 21,228 (8,774)
Cash and cash equivalents at beginning of period . . . . . . . . . . . . . . . . 16,091 16,022
------- -------
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . . . . . $37,319 $7,248
------- -------
------- -------
Other cash flow information:
Taxes paid during the period . . . . . . . . . . . . . . . . . . . . . . . . . $834 $122
------- -------
------- -------
Noncash financing activities:
Tax benefit from non-qualified stock options exercised . . . . . . . . . . . . $198 $84
------- -------
------- -------
Unrealized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . $66 ($35)
------- -------
------- -------
See notes to consolidated financial statements.
</TABLE>
5
<PAGE>
QRS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL
QRS Corporation's (the Company's) product families are Catalog
Services, Network Services, Inventory Management Services (IMS),
Logistics Management Services (LMS), and Professional Services. The
Company derives revenues from five principal and related sources:
monthly charges for accessing Catalog Services, the transmission of
standard business documents over a network, IMS-related fees based on
negotiated monthly service charges, LMS fees, and consulting fees.
Network Services pricing is based primarily on the volume of
characters transmitted and the type of network access utilized, and
incorporates discounts based on volume.
The balance sheet as of March 31, 1998, the statements of earnings and
the statements of cash flows for the three months ended March 31, 1998
and 1997 have been prepared by the Company without audit. In the
opinion of management, all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at March 31, 1998 and
for all periods presented have been made. The balance sheet as of
December 31, 1997 is derived from the Company's audited financial
statements as of that date.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been consolidated or omitted as permitted
by regulations of the Securities and Exchange Commission. Certain
previously furnished amounts have been reclassified to conform with
presentations made during the current periods. It is suggested that
these interim consolidated financial statements be read in conjunction
with the annual audited financial statements and notes thereto
included in the Company's Form 10-K for the year ended December 31,
1997.
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles necessarily requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the balance sheet dates and the reported amounts of
revenues and expenses for the periods presented. Actual amounts may
differ from such estimates.
The results of operations for the periods ended March 31, 1998 and
1997 are not necessarily indicative of the operating results
anticipated for the full year.
Certain reclassifications have been made to the 1997 amounts to
conform to the 1998 presentation.
2. SUBLEASE LOSS RESERVES
During the quarter ended March 31, 1998, outstanding matters with
regard to the Uniquest bankruptcy were substantially resolved;
accordingly the Company recognized a gain on sale of software and
services business of $1,494,000 less applicable income taxes of
$598,000. The remaining sublease loss reserve of $480,000 at March 31,
1998 and $536,000 at December 31, 1997 representing the provisions
established for nonpayment by Uniquest of future sublease obligations
was reclassified to Deferred rent and other and will be amortized over
the remaining lease term through June 30, 2010.
3. STOCK OPTIONS
During the first three months of 1998, the Company did not grant any
options. Options to purchase 17,550 shares of common stock were exercised.
At March 31, 1998,1,289,581
6
<PAGE>
shares were subject to outstanding options, of which 399,092 were
exercisable. Options to purchase approximately 79,946 shares of common
stock are available for future grant under the Company's 1993 and 1997
Stock Option Plans.
4. EARNINGS PER SHARE
The Company calculates basic earnings per share (EPS) and diluted EPS in
accordance with SFAS No. 128. Basic EPS is calculated by dividing net
earnings for the period by the weighted average common shares outstanding
for that period. Diluted EPS takes into account the effect of dilutive
instruments, such as stock options, and uses the average share price for
the period in determining the number of incremental shares that are to be
added to the weighted average number of shares outstanding.
The following is a summary of the calculation of the number of shares used
in calculating basic and diluted EPS:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1998 1997
--------- ---------
<S> <C> <C>
Shares used to compute basic EPS 8,540,109 8,411,119
Add: effect of dilutive securities 375,216 237,187
--------- ---------
Shares used to compute diluted EPS 8,915,325 8,648,306
--------- ---------
--------- ---------
</TABLE>
5. COMPREHENSIVE INCOME
Effective January 1, 1998, QRS adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This
Statement requires that all items recognized under accounting
standards as components of comprehensive earnings be reported in an
annual financial statement that is displayed with the same prominence
as other annual financial statements. This Statement also requires
that an entity classify items of other comprehensive earnings by their
nature in an annual financial statement. For example, other
comprehensive earnings may include foreign currency translation
adjustments and unrealized gains and losses on marketable securities
classified as available-for-sale. Annual financial statements for
prior periods will be reclassified, as required. QRS' total
comprehensive earnings were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
----------------------------
1998 1997
------ ------
<S> <C> <C>
Net earnings $3,359 $1,925
Other comprehensive gain (loss) 66 (35)
------ ------
Total comprehensive earnings $3,425 $1,890
------ ------
------ ------
</TABLE>
7
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM
THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF
INTENSE COMPETITION IN THE ELECTRONIC COMMERCE BUSINESS, THE COMPANY'S
DEPENDENCE ON KEY RETAILERS, THE COMPANY'S ABILITY TO SUCCESSFULLY INTRODUCE
NEW PRODUCTS AND SERVICES, THE COMPANY'S DEPENDENCE ON THE IBM GLOBAL NETWORK
AND OTHER RISK FACTORS SET FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1997.
GENERAL
QRS Corporation's (the Company's) product families are Catalog Services,
Network Services, Inventory Management Services (IMS), Logistics Management
Services (LMS), and Professional Services. The Company derives revenues from
five principal and related sources: monthly charges for accessing Catalog
Services,the transmission of standard business documents over a network,
IMS-related fees based on negotiated monthly service charges, LMS fees, and
consulting fees. Network Services pricing is based primarily on the volume
of characters transmitted and the type of network access utilized. Network
Services pricing also incorporates discounts based on volume.
RESULTS OF OPERATIONS
The Company's revenues increased by 23% to $20.0 million for the first
quarter of 1998, from $16.4 million for the first quarter of 1997. These
increases were primarily attributable to four factors. First, the number of
customers increased from 217 retailers and 4,818 vendors and carriers as of
March 31, 1997 to 235 retailers and 5,870 vendors and carriers as of March
31, 1998. Second, the number of catalog trading partnerships increased as a
result of the increase in the number of customers and their trading links
with each other. Third, customers increased the number, type and size of
transactions transmitted over the network, as well as the utilization of
Catalog Services. Fourth, the Company expanded its product offerings in IMS
and Professional Services product families.
Cost of sales consists primarily of the cost of purchasing network services
and the cost of the Company's data center and technical customer support
services. Cost of sales increased by 24% to $11.3 million for the first
quarter of 1998, from $9.1 million for the first quarter of 1997. The
increase was principally due to increases in purchased network services,
reflecting growth in Network Services, purchased under a long-term contract,
discounted based upon a multi-year volume commitment, and an expanded
customer support group reflecting growth in customers and products. The
gross profit margin was 44% for the first quarter of 1998 compared to 44% for
the first quarter of 1997. Improved pricing on purchased network services
was offset by increased sales of certain lower margin network services, price
competitiveness, and volume discounts earned by larger customers.
Sales and marketing expenses consist primarily of personnel and related costs
in the Company's sales and marketing organizations, as well as the costs of
various marketing programs. Sales and marketing expenses increased 22% to
$2.8 million for the first quarter of 1998, from $2.3 million for the first
quarter of 1997. This increase reflects the Company's expansion of its
retailer and vendor-specific coverage and growth in its Program Sales and
Enablement organization, the group responsible for rapidly enabling trading
partners for key hub customers.
8
<PAGE>
Product development expenses consist primarily of personnel and equipment
costs related to research, development and implementation of new services and
enhancement of existing services. Product development expenses decreased by
6% to $940,000 for the first quarter of 1998, from $1.0 million for the first
quarter of 1997. The Company capitalized product development costs of
$349,000 and $127,000 for the first quarters of 1998 and 1997, respectively.
The increase in capitalized product development costs in 1998 is due to
increased product development on products which had reached technological
feasibility.
General and administrative expenses consist primarily of the personnel and
related costs of the Company's finance and administrative organizations, as
well as professional fees and other costs. General and administrative
expenses increased 27% to $1.5 million for the first quarter of 1998,
compared to $1.2 million for the first quarter of 1998. This increase was
primarily due to increased headcount to support a larger organization.
Interest income consists primarily of interest earned on cash, cash
equivalents and investment securities. Interest income increased to $543,000
for the first quarter of 1998, compared to $441,000 for the first quarter of
1997, as a result of higher investment balances
As a result of the foregoing, earnings from continuing operations increased
28% to $4.1 million for the first quarter of 1998, compared to $3.2 million
for the first quarter of 1997.
In the first quarter of 1998, the Company reported a $1.5 million gain on
sale of software and services business, net of applicable income taxes of
$598,000, related to the substantial resolution of the bankruptcy proceedings
of the purchaser.
Income taxes were $1.6 million and $1.3 million for the first quarters of
1998 and 1997, respectively. The 1998 and 1997 income tax rates of 40%
approximate the combined effective federal and state income tax rates.
As a result of the foregoing, net earnings increased 74% to $3.4 million for
the first quarter of 1998, compared to $1.9 million for the first quarter of
1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital increased from $42.3 million at December 31,
1997 to $47.8 million at March 31, 1998 primarily due to short-term and
positive cash flow from operations. Deferred income tax assets decreased as
the Company continued to use tax Net Operating Losses (NOLs) to defer the
Company's cash requirements for tax payments. The Company expects to have
utilized all such NOLs during 1998, and expects an increase in the use of
cash for payment of taxes thereafter. Cash, cash equivalents and marketable
securities increased from $34.8 million at December 31, 1997 to $41.3 million
at March 31, 1998. Total assets increased from $64.0 million at December 31,
1997 to $68.8 million at March 31, 1998, while total liabilities increased
from $9.3 million at December 31, 1997 to $10.2 million at March 31, 1998.
The increase of $6.5 million in cash, cash equivalents and marketable
securities from December 31, 1997 to March 31, 1998 resulted primarily from
positive cash flow from operations, including the timing of certain large
payments to vendors.
Management believes that the cash resources available at March 31, 1998, and
cash anticipated to be generated from future operations will be sufficient
for the Company to meet its working capital needs, capital expenditures and
Common Stock repurchases for the next year. The Company does not intend to
pay cash dividends with respect to common stock in the foreseeable future.
9
<PAGE>
II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
10.47 Certificate of Amendment of Certificate of Incorporation of QRS
Corporation filed with the Delaware Secretary of State on May 11,
1998.
27.1 Financial Data Schedule
B. REPORTS ON FORM 8-K
None
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized and in the capacity indicated.
QRS CORPORATION
---------------
(Registrant)
\s\ H. Lynn Hazlett
--------------------------------------------
May 15, 1998 H. Lynn Hazlett
Chief Executive Officer
\s\ Shawn M. O'Connor
--------------------------------------------
May 15, 1998 Shawn M. O'Connor
Executive Vice President, Chief Operating Officer
and Chief Financial Officer (Principal Financial
Officer)
11
<PAGE>
Exhibit 10.47
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
OF
QUICKRESPONSE SERVICES, INC.
a Delaware corporation
(pursuant to Section 242 of
the Delaware General Corporation Law)
The undersigned, H. Lynn Hazlett, HEREBY CERTIFIES AS FOLLOWS:
FIRST: The name of the corporation (hereinafter called the
"Corporation") is QuickResponse Services, Inc.
SECOND: The Certificate of Incorporation of said Corporation, which
was originally incorporated in Delaware on June 23, 1997 under the name
QuickResponse Delaware, Inc., and whose name was corrected by Certificate of
Correction on October 21, 1997 to the Corporation's current name of
QuickResponse Services, Inc., is hereby amended by striking out Article First
thereof and by substituting in lieu of said Article First, the following new
Article First:
"FIRST: The name of this corporation is QRS Corporation."
THIRD: The amendment of the Certificate of Incorporation of the
Corporation herein certified has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Amendment of Certificate of Incorporation this 8 day of May, 1998.
\s\ H. Lynn Hazlett
--------------------------------------------
H. Lynn Hazlett, Chief Executive Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 37,319
<SECURITIES> 3,995
<RECEIVABLES> 15,032
<ALLOWANCES> 979
<INVENTORY> 0
<CURRENT-ASSETS> 56,696
<PP&E> 13,181
<DEPRECIATION> 4,671
<TOTAL-ASSETS> 68,766
<CURRENT-LIABILITIES> 8,876
<BONDS> 0
0
0
<COMMON> 64,304
<OTHER-SE> (5,710)
<TOTAL-LIABILITY-AND-EQUITY> 68,766
<SALES> 0
<TOTAL-REVENUES> 20,034
<CGS> 0
<TOTAL-COSTS> 11,255
<OTHER-EXPENSES> 5,218
<LOSS-PROVISION> 480
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,105
<INCOME-TAX> 1,642
<INCOME-CONTINUING> 2,463
<DISCONTINUED> 896
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,359
<EPS-PRIMARY> 0.39
<EPS-DILUTED> 0.38
</TABLE>
